According to demos, Windows 7's multitouch software can enable desktop and laptop PC users to use their fingers to draw pictures on-screen, zoom in and out of photos, zip quickly through slideshows, search and skim maps, and even play an on-screen piano. The multitouch features will be available via Windows 7, as well as on third-party software.

A live demonstration was given last night at The Wall Street Journal's All Things Digital conference in the San Diego suburb of Carlsbad (transcript here) during an on-stage interview with Microsoft CEO Steve Ballmer and Chairman Bill Gates.

During that interview, Ballmer also said Windows 7 will arrive in late 2009, according to accounts from the All Things Digital conference, including from CNET's News.com and Reuters. The reports appear to confirm speculation earlier this spring stemming from comments by Gates that the operating system would be scheduled to ship late next year, or about three years after the Vista operating system was released to manufacturing in November 2006.

Meanwhile, Windows development chief Steven Sinofsky, in an interview with CNET News.com, said the operating system would be generally available in January 2010.

At the conference, Gates, who is scheduled to officially retire June 30, also reportedly said he plans to spend 20% of his post-retirement time working at Microsoft and the rest at the Bill & Melinda Gates Foundation. At Microsoft, he will work on future versions of Microsoft Office, search technology and interface technologies such as speech input and handwriting recognition.